What is a DBA and How Does it Work?
October 1, 2024
Understand what a DBA is, how to obtain it, who needs it, and the key differences between a DBA and other legal structures like LLCs and corporations.
English
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Royalty management is one of the most important and complex tasks for any record label. Ensuring that artists receive their payments correctly and on time is crucial for maintaining good relationships and ensuring the financial success of both the artists and the label.
The music industry in Latin America has experienced impressive growth in recent years. According to a report by the International Federation of the Phonographic Industry (IFPI), Latin America was the fastest-growing region in recorded music revenues in 2023, with an increase of 31.2%. In Colombia, artists earned millions in royalties from platforms like Spotify. In 2023, Colombian artists generated over $60 million in royalties just from Spotify, highlighting the potential and importance of Latin American music in the global economy.
Latin music and artists have significant relevance in the United States. With a growing Latino population and increasing cultural influence, Latin music has found a solid home in the U.S. market. Artists like Bad Bunny, J Balvin, and Karol G not only dominate the charts in Latin America but have also conquered the U.S. market. This influence translates into a constant demand for Latin music, generating significant royalty income for artists and record labels.
The growth of the music industry is also reflected in the creation of new record labels. In the past five years, there has been a significant increase in the number of independent record labels in Latin America and the United States. According to a report by the Recording Industry Association of America (RIAA), more than 1,000 new record labels have been created in the United States since 2019. This growth not only fosters diversity and innovation in music but also expands opportunities for artists to claim and manage their royalties more efficiently.
In this article, we will explore how a record label can claim royalties for created songs and videos, the types of royalties available, and the platforms and processes involved.
To manage and claim royalties correctly, it is crucial to understand the different types that exist:
These royalties are generated every time a song is played on the radio, television, live at concerts, in public venues, and more. Collective management organizations such as ASCAP, BMI, and SESAC in the United States handle the collection and distribution of these royalties.
These are earned from the reproduction of music in physical formats (such as CDs and vinyl) and digital formats (downloads and streaming). Mechanical royalties are managed by entities like the Harry Fox Agency in the United States and other international organizations.
These are generated when a song is used in synchronization with visual media, such as movies, TV shows, commercials, and video games. Synchronization agreements are negotiated directly between the record label and content producers.
These come from the streaming of music and videos on digital platforms like Spotify, Apple Music, YouTube, and others. It is essential to be registered on platforms like SoundExchange to collect royalties from internet radio services and other digital transmissions.
The first step to claiming royalties is ensuring that all songs and videos are properly registered. This includes registering the music and videos with the relevant copyright management societies and digital distribution platforms.
For public performance and mechanical royalties, it is essential to register works with the relevant collective management societies:
For digital rights and synchronization royalties, works must be registered on platforms such as:
Once the works are registered, constant monitoring is crucial to ensure all royalties are claimed and collected correctly.
Record labels should use monitoring tools to track where and how the music and videos are being used. These tools can include:
After identifying the use of the works, record labels must submit claims to the collective management societies and digital platforms. This includes:
Claiming royalties for songs and videos is a complex process that requires meticulous registration, constant monitoring, and proactive management. Record labels must be aware of the different sources of royalties and use the appropriate tools and platforms to ensure that artists receive their due payments. By following these steps, record labels can maximize their artists’ income and maintain efficient and transparent copyright management.
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